3i closes second CLO this week

The firm priced €230 million of triple A rated notes at 134bps over Euribor. The CLO is 3i’s sixth CLO 2.0.

3i Debt Management has closed its second CLO this week and sixth European 2.0 CLO. The European private equity and debt manager announced the closing of its €413 million Harvest CLO XII following the close of a US CLO, Jamestown VII, at $510.5 million. 

The €229.8 million of A-1 class notes are rated AAA by S&P and Fitch and were priced at Euribor plus 1.34 percent. The €5 million of A-2 class notes carried the same ratings and priced at 1.84 percent. 

Like the firm’s last European CLO, Harvest XI, which closed in March on €414.7 million, the latest vehicle will focus its investments on European senior secured leveraged loans. The fund matures in August 2028. 

The vehicle is not loan only, but does satisfy US Volcker rule requirements through the “solely outside the United States” (SOTUS) exemption, a source close to the firm said. 

As it has done on previous vehicles, 3i met European risk retention requirements by holding a horizontal slice of the equity.

“We are pleased to have successfully closed Harvest XII, our second CLO this week following the $510.5 million Jamestown VII CLO. In the year to date, we have raised c. $2.3 billion through four CLO vehicles and the launch of the 3i Global Floating Rate Income Fund,” said Jeremy Ghose, 3i Debt Management’s chief executive and managing partner.

The CLO has a four-year investment period and is structured as a two-year non-call fund. 

The rest of the capital structure of the CLO comprises:

  • €37.75 million class B-1 notes rated AA/AA (S&P and Fitch), priced at Euribor plus 205bps;
  • €13 million class B-2 notes rated AA+/AA, priced at 2.79 percent;
  • €26.5 million class C notes rated A/A, priced at 2.65 percent over Euribor; 
  • €20.5 million class D notes rated BBB/BBB, priced at Euribor plus 325bps;
  • €23.5 million class E notes rated BB/BB, priced at Euribor plus 475bps;
  • €14 million class F notes rated B-/B-, priced at 6.24 percent over Euribor;
  • €43 million in unrated subordinated notes.

 

3i Group had total assets under management of around $11 billion, as of 31 March. It recently launched a global floating rate income fund, an open-ended vehicle which will invest across European and US senior secured floating rate corporate credit.